Insider Media Limited

Research commissioned by Insider into Midlands business sentiment has revealed that 55 per cent of companies are more profitable than they were a year ago. Three in four manufacturers said their profitability had increased.

The findings are based on 91 interviews which were conducted with companies across professional services, manufacturing, construction, distribution and other sectors by the Murray Consultancy over the last few weeks.

Respondents who said their profitability had deteriorated (26.4 per cent) cited as reasons government spending cuts, a drop in demand and customer cost cutting. One in three also mentioned an increase in their own cost base.

However, across all respondents 56 per cent said that the public sector cuts had not impacted upon their business. Perhaps surprisingly only 44 per cent of construction firms said they had been affected by public sector cuts.

Turning to the thorny issue of bank finance, 22 per cent of respondents said they had found their bank inaccessible upon being approached to support their business financially. But around 50 per cent said they had found their banks accessible.

Looking at opportunities and barriers to growing their business, two in three businesses saw increasing their client bases as an opportunity for the future whilst over half saw an increase in sales and exports as crucial. The major threats to growth over the next year are perceived as the recession and a lack of confidence whilst an increase in costs and government cutbacks also featured highly.

Our business respondents were asked what one thing could make their business more profitable. More sales was, as might be expected, the top answer but in second place was a decrease in fuel taxes.